Further details on the Terms of Reference of the Committees and the NEDs can be accessed here.
There is no prescribed corporate governance regime in the UK for AIM companies. Although the UK Corporate Governance Code does not apply to companies whose shares are admitted to trading on AIM, the Directors recognise the importance of sound corporate governance commensurate with the size and nature of the Group and the interests of its shareholders.
The QCA has published the QCA Corporate Governance Code, a set of corporate governance guidelines for AIM companies, which include a code of best practice, comprising principles intended as a minimum standard, and recommendations for reporting corporate governance matters. The Board has adopted the QCA Corporate Governance Code with effect from Admission, so far as it is practicable having regard to the size and nature of the Group.
The Board is responsible for strategy, performance, approval of any major capital expenditure and the framework of internal controls. There is a formal schedule of matters reserved for the Board and the Board has an annual work plan identifying items for its consideration at each of its meetings.
Board meetings and information provided to the Board.
The Board is scheduled to meet at least seven times a year and one of these meetings is set aside for a detailed consideration of strategy.
The papers circulated prior to Board meetings include the following:
- a report from the Managing Director covering performance and forecasts, an update on strategy and details of any matters referred for Board approval.
- a report from the Finance Director covering financial results, comparison of forecasts with published consensus. This report also covers financing and tax matters and confirmation of internal controls.
- reports from senior management responsible for key functions such as sales, marketing and human resources.
- capital expenditure approval requests and investment proposals.
- papers on issues scheduled for Board consideration for example, health and safety or insurance.
A full set of Board papers is circulated on a quarterly basis. In other months, the Directors receive a summary report providing an update on performance and flagging any issues for consideration by the Board.
The Board maintains regular contact with Investec, the company’s nominated adviser and the Board obtains advice as required regarding compliance with its obligations under the AIM Rules. Advice is also taken as required from external legal and accountancy firms. The Remuneration Committee also intends to take advice from an independent remuneration consultant as referred to in the Remuneration Committee section.
The Board has delegated specific responsibilities to the committees described below. The full terms of reference of the committees are available on this website.
Membership: Andrew Herbert (Committee Chairman) and Michael Ashley
The Audit Committee will meet at least twice each year to consider and discuss audit and accounting related issues. The Committee is responsible for determining the application of the financial reporting and internal control principles, including reviewing regularly the effectiveness of the Company’s financial reporting, internal control and risk-management procedures and the scope, quality and results of the external audit.
The Committee will receive reports from the auditors on the results of audits and reviews and their proposals for the structure and focus of future audits. The auditors will also provide reports on new developments within the scope of the Committee’s responsibilities together with information to assist the Committee in assessing of the qualifications, expertise and independence of the auditors.
Membership: Michael Ashley (Committee Chairman) and Andrew Herbert
The Remuneration Committee will meet at least once a year to review the performance of the executive Directors and set the scale and structure of their remuneration and the basis of their service agreements with due regards to the interests of shareholders. In determining the remuneration of executive Directors, the Remuneration Committee seeks to enable the Company to attract and retain executives of the highest calibre. The Remuneration Committee also makes recommendations to the Board concerning the allocation of awards to executives under the Share Plans. No Director is permitted to participate in discussions or decisions concerning their own remuneration.
The Committee intends to obtain information from external independent remuneration consultants to assist in the review of the remuneration of the Chairman and executive Directors.
Membership: Andrew Herbert (Committee Chairman), Stephen Fenby and Michael Ashley
The Nomination Committee will meet at least once a year. It is responsible for reviewing the structure, size and composition of the Board, preparing a description of the role and capabilities required for a particular appointment and identifying and nominating candidates to fill Board positions as and when they arise.
Roles and responsibilities of Directors
Chairman - Andrew Herbert
Leadership of the Board and setting its agenda.
Ensuring effective decision making processes through the Board and its committees
Developing strong working relationships between executive and non-executive Directors
Ensuring Directors are aware of and understand the views of major shareholders and other key stakeholders.
Managing Director- Stephen Fenby
Management of the business. Accountable to the Board for the best performance and results of the business
Proposing strategy and responsibility for the delivery of that strategy in line with the direction of the Board.
Leadership of the executive team.
Finance Director- Anthony Bailey
Supporting the Managing Director in developing and implementing strategy. Responsible for the financial performance of the Group.
Independent non-executive Director -Michael Ashley
Assisting in the development of strategy and monitoring its delivery
Responsible for bringing sound judgement and objectivity to the Board’s decision-making process, and constructively challenging and supporting the Executive Directors.
Reviewing internal controls and the integrity of financial information.
Reviewing the performance of the Executive Directors.
Company Secretary- Anthony Bailey
Provision of timely, accurate and high quality information to the Board and its committees
Arranging for minutes to be taken of all Board and committee meetings
Advising on the Board’s obligations
Proposal and management of the regular Board evaluation process.
The post of Company Secretary is currently held by Anthony Bailey, the Finance Director. The Board considers that the size and nature of the Company means that the two roles can effectively be carried out by Anthony Bailey. The position will be kept under review.
Midwich Group plc – matters reserved for the Board
1.1 Approval of the Group’s long term objectives, strategy, and policies.
1.2 Acquisition, disposal or restructuring of any business
1.3 Expansion of the Group’s activities into new business areas.
1.4 Any decision to cease to operate in any material part of the Group’s business.
2. Structure and capital
2.1 Changes to the Group’s capital structure.
2.2 Major changes to the Group’s corporate structure.
2.3 Any changes to the Company’s listings or its status as a plc.
3. Financial controls and reporting
3.1 Approval of preliminary announcements of interim and final results.
3.2 Approval of the Annual Report and Accounts
3.3 Approval of the dividend policy.
3.4 Declaration of dividends.
3.5 Approval of any significant changes in accounting policies or practices.
3.6 Approval of annual budget
3.7 Approval of treasury policies.
3.8 Lending or borrowing outside the treasury policy of the Company
3.9 Changes to borrowing facilities
3.10 Capital expenditure in excess of £100,000
4. Risk Management and Internal controls
4.1 oversight and review of risk management and internal control; and
determining the appropriate level of risk exposure for the Company.
5.1 Approval of all material contracts and any contracts not in the ordinary course of business.
6.1 Approval of resolutions and related documentation to be put forward to shareholders at a general meeting.
7. Board membership and other appointments
7.1 Board appointments and removals; selection of the Chairman and Managing Director; membership and chairmanship of Board committees, following recommendations from the Nomination Committee.
7.2 Succession planning for the Board
7.3 Appointment or removal of the Company Secretary.
7.4 Appointment, reappointment or removal of the external auditor to be put to shareholders for approval, following the recommendation of the Audit Committee.
8.1 Determining the remuneration policy for the Chairman, the Managing Director and the Executive Directors.
8.2 Determining the remuneration of the Non-Executive Directors, subject to the Articles of Association and shareholder approval as appropriate.
8.3 The introduction of new share schemes or new long-term incentive schemes or major changes to existing schemes.
9. Delegation of Authority
9.1 The division of responsibilities between the Chairman and the Managing Director.
9.2 Approval of terms of reference of Board committees.
9.3 This schedule of matters reserved for Board decisions
10. Corporate governance
10.1 Conduct of the annual evaluation of its own performance.
10.2 Determining the independence of directors.
11.1 Settlement of litigation involving amounts in excess of that delegated to the Managing Director or which is otherwise material to the interests of the Group.
12.1 Approval of group insurance arrangements.
13.1 Any matter which requires the Company to publish results or issue a regulatory announcement.